Magnetic stripe-bearing documents, for example credit cards, banking cards, and debit cards, are a type of data-bearing instrument commonly used in a variety of transactions. Account data is recorded on a stripe of magnetic material on the card. The data may include the issuing bank ID, account number, account holder's name, and/or security codes for the account.
When a magnetic stripe card is presented for payment, the magnetic stripe is read by a point-of-sale (POS) terminal, which extracts the data, sends it for validation to the bank, and waits for acceptance or rejection of the payment. If the transaction is accepted, the POS terminal prints a voucher (or obtains an electronic signature) and prints a receipt, and the merchant sees that the voucher is signed with the appropriate signature and provides the receipt with the purchased goods. The POS terminal can be a card reader or a device incorporating a card reader. A card reader typically includes at least a magnetic read head (or sensor) and supporting circuitry, such as a decoder and an encryption circuit.